The Irish Banking Federation is defending itself against an accusation from the Central Bank that financial institutions are in denial about the mortgage arrears crisis.
The Central Bank's Director of Credit institutions and Insurance supervision Fiona Muldoon says banks are owed €35bn by customers in arrears.
She says this debt has to be dealt with.
Ms Muldoon says the banks have lacked leadership and she is calling on them to act now, warning that there is no commercial rationale for a wait and see strategy.
However, chief executive of the IBF Pat Farrell says banks are doing what they can in very difficult circumstances.